On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $910,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Residual N/A none 12% of cost $13,000 Asset Land Building Equipment Vehicles Total Cost $ 145,000 410,000 210,000 145,000 $ 910,000 Value Estimated Useful Life (in years) N/A 20 10 On June 29, 2022, equipment Included in the March 31, 2021, purchase that cost $91,000 was sold for $71,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2021. 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2022, and the sale of equipment. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.
On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $910,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Residual N/A none 12% of cost $13,000 Asset Land Building Equipment Vehicles Total Cost $ 145,000 410,000 210,000 145,000 $ 910,000 Value Estimated Useful Life (in years) N/A 20 10 On June 29, 2022, equipment Included in the March 31, 2021, purchase that cost $91,000 was sold for $71,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2021. 2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2022, and the sale of equipment. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total
purchase price of $910,000 to the various types of assets along with estimated useful lives and residual values are as follows:
Estimated Residual
Asset
Land
Building
Equipment
Vehicles
Total
Cost
$ 145,000
410,000
210,000
145,000
$ 910,000
Value
N/A
none
12% of cost
$13,000
Building
Equipment
Vehicles
Estimated Useful
Life (in years)
N/A
20
On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $91,000 was sold for $71,000. Herzog uses the
straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year
depreciation is calculated based on the number of months an asset is in service.
8
10
Required:
1. Compute depreciation expense on the building, equipment, and vehicles for 2021.
2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2022, and the sale of equipment.
3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.
Complete this question by entering your answers in the tabs below.
< Required 1
Required 1 Required 2 Required 3
Compute depreciation expense on the building, equipment, and vehicles for 2021. (Do not round intermediate calculations.)
Depreciation
Expense
Required 2 >
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